Climate controlled seat specialist Amerigon has posted a sharp drop in net income for the third quarter to US$648,000, or $0.03 per share, compared with $3.1m, or $0.13 per share a year ago.

The company said it had booked a deferred research and development tax benefit of about $1.7m in the third quarter of 2007.

Q3 2008 revenues rose to $16.6m from $15.9m as automakers introduced new models with the company's heated and cooled seats which sold for a higher average unit price.

Amerigon said, however, that lower sales volumes of existing vehicle models due to the downturn in the automotive market affected Q3 revenue.

Research and development expenses increased $603,000.

President and CEO Daniel Coker said that even though the continuing deterioration of the worldwide economy made it difficult to see much improvement in the automotive market in the next several quarters, he remained optimistic about Amerigon's long-term prospects as it continued to expand the adoption of CCS into new vehicle lines and move toward the commercialisation of additional TE products for other automotive and non-automotive applications.

"While we had a modest increase in revenue compared to last year's third quarter, our results for the 2008 third quarter were definitely impacted by the decline in the worldwide automotive market," Coker said.

"In the last 30 days, North American automotive manufactures have drastically reduced their production schedules, followed by similar actions by the Asian automotive manufacturers, which we believe will result in the fourth quarter coming in below our original plan. The automotive market is certainly down, but it is encouraging that CCS has not lost its popularity with consumers, judging by our still strong 'take rates,' and its appeal to vehicle manufacturers."

Gross margin in the third quarter was 29.1% compared with 32.5% a year ago due to higher raw material costs and a change in product mix. 

Amerigon said it was working to reduce raw material costs.

For the first nine months of 2008, revenues were $50.8m, up from $47.2m a year earlier. Gross margin was 30.9% compared with 32.9%.

Net income fell to $3.3m, or $0.14 per share, compared with $5.6m, or $0.25 per share the previous year.

Unit shipments of CCS systems for the 2008 third quarter and first nine months increased to 237,000 and 743,000, up from 234,000 and 700,000 units in 2007.

Amerigon said the trend towards a more balanced distribution of revenue between North American and international customers continued during the 2008 third quarter and first nine months.

Revenue from European and Asian customers in this year's third quarter increased to 53% of the total, up from 40% in the 2007 third quarter, and revenue from North American customers in the 2008 third quarter was 47% of total revenue compared to 60% in last year's third quarter.

Due to current worldwide economic conditions and the uncertainty in the global automotive market, the company expects product revenues in the 2008 fourth quarter to be between $14m and $15m and for the full year revenues are expected to be flat to marginally up over 2007.

This compares with earlier guidance of a 10 to 20% year on year increase for 2008.

Amerigon said that, due to the credit crunch, it could not yet obtain "dependable" 2009 production forecasts from customers and would provide guidance for 2009 later.